463,000 'turned down for mortgages'

Posted: 17 Apr 2007 11:06:10 GMT

More than 460,000 mortgage applications were rejected during the last six months as higher interest rates injected new caution into lenders' decision-making, new research has shown.

More than 460,000 mortgage applications were rejected during the last six months as higher interest rates injected new caution into lenders' decision-making, new research has shown.

Figures from MoneyExpert.com showed that in the half-year to mid-March 463,000 applications were turned down, a period coinciding with three interest rate rises which took the base rate from 4.5 per cent to 5.25 per cent.

This figure equates to 77,000 per month.

MoneyExpert chief executive Sean Gardner said: "Affordability is the major issue in the mortgage market as recent reports of a drop in the number of first-time buyers demonstrates."

However, he added, with the number of rejections was so high and the number of first-timers at a two-year low it was clearly not just first-time buyers who were being turned down.

The Bank of England last raised interest rates in January and many analysts have predicted that a further rise will take place when the monetary policy committee next meets in early May.


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